Economic Systems and Climate Change Effects

These flashcards cover fundamental concepts related to economic systems and the impact of climate change on production capabilities.

What does the PPC show in economics?

The PPC (Production Possibility Curve) shows an economy's potential to produce goods and services.

What effect do shifts in the PPC have on an economy's production potentials?

A shift out increases production potentials, while a shift in decreases it.

What are the types of economic systems based on?

Economic systems differ based on ownership of resources and methods of directing, coordinating, and motivating economic agents.

What are the fundamental economic questions an economic system strives to answer?

(i) What to produce? (ii) How to produce? (iii) How to distribute? (iv) How to accommodate changes? (v) How to promote technological progress?

What characterizes a Traditional Economy?

In a Traditional Economy, economic questions are answered by traditions, factors of production are communally owned, and trade occurs through barter.

What is a defining feature of a Command Economy?

In a Command Economy, central authority answers fundamental economic questions, and resources are government-owned.

How is income distributed in a Command Economy?

Income in a Command Economy is distributed based on need rather than productivity.

What role does the consumer have in a Market Economy?

In a Market Economy, the consumer is sovereign, deciding what to produce through spending.

What ensures the survival of a market economy?

The Rule-of-Law, preservation of private property rights, and enforcement of contracts ensure the survival of a market economy.

What type of intervention occurs when there is market failure?

Government intervention occurs in cases of market failure, such as with public goods and the free rider problem.